Chapter-2
1.On October 1, C. R. Byrd invests $10,000 cash in an advertising company called Pioneer Advertising
October 1 Pioneer purchases office equipment costing $5,000 by signing a 3-month, 12%, $5,000
note payable.
October 2 Pioneer receives a $1,200 cash advance from R. Knox, a client, for advertising services
that are expected to be completed by December 31.
October 3 Pioneer pays office rent for October in cash, $900.
October 4 Pioneer pays $600 for a one-year insurance policy that will expire next year on September
30.
October 5 Pioneer purchases an estimated 3-month supply of advertising materials on account from
Aero Supply for $2,500.
October 9 Pioneer hires four employees to begin work on October 15. Each employee is to receive a
weekly salary of $500 for a 5-day work week, payable every 2 weeks—first payment made on October
26.
October 20 C. R. Byrd withdraws $500 cash for personal use
October 26 Pioneer owes employee salaries of $4,000 and pays them in cash (see October 9 event).
October 31 Pioneer receives $10,000 in cash from Copa Company for advertising services perform
Instructions:
Make journal Entries, Ledger and Trial Balance for of the Transactions of Pioneer Advertising for the month
of October.
2. The following accounts come from the ledger of SnowGo Company at December 31, 2017.
Equipment $88,000 Owner’s Capital $20,000
Owner’s Drawings $8,000 Salaries and Wages Payable $2,000
Accounts Payable $22,000 Notes Payable (due in 3 months) $19,000
Salaries and Wages Expense $42,000 Utilities Expense $3,000
Accounts Receivable $4,000 Prepaid Insurance $6,000
Service Revenue $95,000 Cash $7,000
Prepare a trial balance in good form.
3. Presented below is information related to Hammond Real Estate Agency.
Oct.1 Lia Berge begins business as a real estate agent with a cash investment of $30,000
Oct 2 Paid rent, $700 on office space.
Oct 3 Purchases office equipment for $2,800, on account.
Oct 6 Sells a house and lot for Hal Smith; bills Hal Smith $4,400 for realty services performed.
Oct 27 Pays $1,100 on the balance related to the transaction of October 3.
Oct 30 Receives bill for October utilities, $130 (not paid at this time).
Instructions
Journalize the transactions. (You may omit explanations)
4. Bob Sample opened the Campus Laundromat on September 1, 2017. During the first month of operations,
the following transactions occurred.
Sept. 1 Bob invested $20,000 cash in the business.
2 The company paid $1,000 cash for store rent for September.
3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month,
12% note payable.
4 Paid $1,200 for a one-year accident insurance policy.
10 Received a bill from the Daily News for online advertising of the opening of the laundromat $200.
20 Bob withdrew $700 cash for personal use.
30 The company determined that cash receipts for laundry services for the month were $6,200.
Instructions
(a) Journalize the September transactions. (Use J1 for the journal page number.)
(b) Open ledger accounts and post the September transactions.
(c) Prepare a trial balance at September 30, 2017.
